Tuesday, February 18, 2025

DMM Bitcoin Raising $320M to Compensate Users Post-Hack

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Originally published on: June 05, 2024

DMM Bitcoin, a Japanese cryptocurrency exchange that fell victim to a major hack resulting in the loss of $320 million in Bitcoin, has announced plans to secure 50 billion yen ($320 million) to reimburse affected users.

The exchange shared in a statement released on June 5 that it intends to recover the stolen customer funds by acquiring an equivalent amount of Bitcoin from its sister company, DMM.com.

DMM Bitcoin has reassured its users that it will execute the necessary purchases with caution to minimize any adverse effects on the market. The investigation into the “unauthorized outflow” of 4,503 BTC that occurred on May 31 is still ongoing.

Expressing deep regret for the incident and its impact on its customers, DMM Bitcoin pledged to continue investigating the root cause of the security breach and promised to provide timely updates as more details unfold.

To cover the costs of compensating its users, DMM Bitcoin borrowed five billion yen ($32 million) on June 3. The exchange is scheduled to increase its capital by an additional 48 billion yen ($308 million) on June 7, with an extra 2 billion yen ($12.8 million) secured through subordinated debt financing on June 10.

Funds for compensation and recovery have been sourced from DMM.com to ensure the protection of customers’ Bitcoin holdings.

The DMM Bitcoin hack ranks as the eighth-largest cryptocurrency breach in history, making it one of the top 10 biggest crypto exchange hacks to date.

Leading the list, the March 2022 Ronin Network hack exploited the network’s validator nodes, resulting in a $620 million theft. In response, Ronin has bolstered its security protocols, introduced $1 million bug bounties, and doubled its validator nodes to prevent future breaches.

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